Even under the best, most amicable circumstances, divorce can be a complicated and stressful experience for both spouses. Sharing your life with another person almost always means sharing possessions and property, and it can be incredibly difficult to divvy up everything in a way that feels fair on both sides.For most married couples, the most valuable shared asset is their home. And while there’s no one, right way to determine what’s done with the property in the event of a divorce, there are several helpful guidelines that can help you decide which path to take: sell your home or transition to sole ownership. Your divorce attorney will be able to shed some light on this area of the divorce negotiations, but you may want to consider working with an experienced real estate agent who is also a Certified Divorce Real Estate Expert (CDRE™). We bring a unique perspective that takes into account both real estate and divorce laws simultaneously. As a certified CDRE™ myself, here are my top three tips for navigating a divorce with shared property:
1. Know Your Finances in Detail
It is a bad idea to even begin to discuss your options and your wishes for your home if you don’t have a complete picture of the total combined finances. Many important questions need to be answered before the couple’s emotions and desires can be addressed. For example:
How much is left on your mortgage?
What is the minimum monthly payment?
What other monthly expenses are associated with the home?
Is the mortgage in both spouses’ names?
Have either of you ever remortgaged the home?
Are there any liens in one or both names?
To be frank, your feelings about what you want to happen may be irrelevant after you get the answer to these questions. So, don’t get caught up in making plans before finding out everything you need to know about the financial status of your home and your spouse first. On a positive note, you might end up being relieved if it turns out that the financial picture is rosier than you thought. You just may discover that you have several, attractive options available to you.
2. Assess as If You Were Selling
Regardless of whether you would like to sell the home or not, it’s important to proceed as if you were going to put it on the market. That means getting an appraisal, inspection and assessment done. Why? Because this will help reveal the market value of the property as well as the current condition of the home.Let’s say that your home has a market value of $700K because it’s a big, beautiful house in an amazing neighborhood with great schools. When an inspector digs deeper, however, it’s revealed that you have a mold problem, a sinking foundation and a roof that’s near the end of its life. Well, that certainly changes things, doesn’t it? Now, the value must reflect all of the necessary work that must be put into the home. Most people fail to take this into account and could find out much later that there is a big expense they didn’t anticipate.
3. Remember, It’s a Business Decision
Emotions can be very strong and persuasive when it comes to the fate of a home you love. And while that’s totally understandable, it’s important to try to take your feelings out of the equation. It may sound like a cold and callous approach, but it’s the right mindset when it comes to planning your financial future.
Let’s put it this way – no home is worth more than your wellbeing.
It’s OK to say that you want to find a way to keep your home on your own, but it’s not OK to be willing to do so at all costs. If it’s not a good decision on paper, then it’s not a good decision and you might not realize it at the time, but you might be so thankful later that you made a smart financial decision that could impact the quality of your life and the life of your kids.As you can see, dealing with shared real estate in a divorce is not simple, and there’s a whole lot to consider before making any choices. That’s why many couples find it helpful to have an unbiased, third party to facilitate the process. A CDRE™ doesn’t represent either spouse, so they’re better positioned to give advice that’s best for the home and both parties. At the end of the day, the best thing you can is to make the decision with both eyes open.
Download our Divorce Real Estate Guide for more help or schedule a strategy call with Leslie.